Web turns into consumer products design shop

Brad Dorfman

CHICAGO: Levi Strauss wants to get personal. So do Millstone coffee and

General Mills.

Makers of household products, toys and apparel are increasingly using the Web

to allow consumers to design their own coffee blends, cereals and dolls.

The concept of letting customers design their own products on the Internet

was pioneered several years ago by Dell Computer Corp. But now, some companies

that manufacture even the most basic consumer products are trying customization

as a way to drive sales in low-growth areas.

"That's the background," Patrick Schumann, branded consumer

products analyst at Edward Jones said. "It's stagnant markets, low growth

of sales, low population growth, very fragmented industries. So each of these

consumer products companies is trying to get the edge."

Procter & Gamble Co. has a Web site (http://www.personalblends.com)

that allows you to create your own blend of its Millstone coffee after answering

a number of questions about taste, consistency and appearance. Aside from

questions about coffee, the site asks how spicy or mild a person prefers salsa

to be and how light or dark they like their chocolate, all of which help pin

down characteristics that the customer would enjoy in a cup of coffee, the

company said.

The answers to these questions are used to form a personalized "tasteprint."

From there, Millstone combines beans with different characteristics to match the

customer's tasteprint and then ships the coffee. The company said it can make

several hundred blends, using different beans and roasts.

The coffee sells for $9.95 a 12-ounce bag, a premium of about $1 to $1.25 a

bag, Procter & Gamble said.

Continued...

What do consumers want?



Cincinnati-based Procter & Gamble is also the major shareholder in http://www.Reflect.com,
a Web-based beauty care products retailer that lets women create customized

products.

Customization helps Procter & Gamble learn more about what its customers

want - information that can be used throughout the company's businesses, said

Nathan Estruth, marketing director for interactive ventures.

"It's really about how we deal with the consumer on a one-to-one

scale," he said.

At the same time, Procter & Gamble is not actively looking to offer

customization for a lot of other products.

"It comes back to where the consumers see value, and there are some

categories where a truly individualistic product gives value and other products

where it doesn't," Estruth said.

Apparel maker Levi Strauss & Co. enables customers to design their own

jeans on the Web (http://www.levi.com),

adjusting size and specific features, though customers still have to phone a

Levi's store to place the order.

"It's primarily a customer service issue, making sure that there's no

misconception about what's going to happen," Jen Crook, manager of the mass

customization area for Levi Strauss, said of the need to call in an order.

General Mills Inc. hopes some customers will see value in individualized

cereals. The maker of Wheaties and Cheerios plans to test a Web site (http://www.mycereal.com)

where customers can combine different ingredients and nutrients to come up with

over 1 million possible cereal combinations.

The cereals will sell at a premium of $1 a serving and will be shipped within

four business days. Capacity restrictions will limit the number of customers who

will have access to the site and a time sensitive code will be required to log

on, the company said.

Not everyone wants customization



General Mills also looks at mycereal.com as a way to gather consumer
information. That could be the key to making customization pay off for basic,

lower-priced goods, said Ranjay Gulati, associate professor of technology and

e-commerce at Northwestern University's Kellogg School of Management.

"Now I can use that information to cross-sell and up-sell to you and

start a dialogue with you," Gulati said of how manufacturers can use

information gained through customization. "If they are going to use this

approach to just make cereal, I think they are wasting their time."

Internet sales are a small fraction of overall revenues for consumer product

companies and most use the Web for advertising and customer contact, rather than

sales. But companies and analysts note that the Internet allows them to gather

much more information than ever before about what a consumer might want.

Still, some analysts question the customization of a product like cereal,

especially since there are dozens of choices on grocery store shelves.

"As soon as you force the consumer to start to make ... decisions down

to the ingredient level, I think you start to dilute what it is that the brand

is supposed to deliver to the consumer," Ken Cassar, senior retail analyst

at Jupiter Research, said.

Toymaker Mattel Inc. has found that customization does not necessarily

translate into sales.

The company has decided to stop selling custom-designed dolls on its http://www.barbie.com

site, because not enough were being sold to make sense economically, spokeswoman

Julia Jensen said. Girls will still be able to design their own dolls on the Web

site, but only for fun.

"I do not think that mass customization will redefine manufacturing and

buying as we currently know it," Cassar said. "The truth of the matter

is that 90 per cent of consumers are comfortable with the products that

everybody else buys."

(C) Reuters Limited 2000.